Goodman Group · ASX:GMG
Goodman — FY2023 Earnings Presentation
44 slides from Goodman's earnings presentation, Aug 17, 2023
Slide 1: Goodman Group FY23 Results: Strong performance positions the business well into FY24
GOODMAN GROUP FY23 RESULTS Strong performance positions the business well into FY24 Goodman Joso, Joso City, Japan 17 August 2023
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER – This document has been prepared by Goodman Group (Goodman Limited (ABN 69 000 123 – This document contains certain “forward-looking statements”. The words “anticipate”, “believe”, 071), Goodman Funds Management Limited (ABN 48067 796 641; AFSL Number 223621) as the
Slide 3: Contents
CONTENTS Section 01 Highlights Section 02 Results overview Section 03 Operational Section 04 Outlook performance Appendices 1. Results analysis 2. Property investment 3. Development 4. Management 5. Capital management 3 GOODMAN GROUP FY23 RESULTS
Slide 4: Highlights
01 HIGHLIGHTS 4 GOODMAN GROUP 1H FY22 RESULTS
Slide 5: Highlights: Strong operational performance positions the Group well for FY24
HIGHLIGHTS Strong operational performance positions the Group well for FY24 $1.8bn $1.6bn OPERATING PROFIT STATUTORY PROFIT + The Group has continued to perform strongly in FY23 + Our strategic locations are driving higher intensity of + Growth in assets under management (AUM) across the with the qu
Slide 6: Highlights
HIGHLIGHTS + By concentrating our investment portfolio in supply + Capital management discipline helping to facilitate long term constrained markets we have maintained high occupancy sustainability of earnings and financial flexibility and positive rental growth – Like-for-like net property income (
Slide 7: Group and Partnership Highlights
GROUP AND PARTNERSHIP HIGHLIGHTS 99% 4.7% 2.5m 8.3% OWN OCCUPANCY NPI GROWTH SQUARE METRES LEASED GROUP GEARING High occupancy maintained at Like for like NPI growth of 4.7% ¹ Across the global portfolio equating With look through gearing of 20.8% 99%¹ and WALE of 5.5 years¹ to $352 million of annua
Slide 8: Results Overview
Rochedale Motorway Estate, Brisbane, Australia 02 RESULTS OVERVIEW 8 GOODMAN GROUP FY23 RESULTS
Slide 9: Results Overview
RESULTS OVERVIEW + Statutory accounting profit of $1,560 million FY22 FY23 – Includes property valuation gains, derivative and foreign currency mark-to-market Operating profit ($M) 1,528.0 1,783.2 movements and other non-cash items Statutory accounting profit ($M) 3,414.0 1,559.9 – Average capitalis
Slide 10: Profit and Loss
PROFIT AND LOSS + Full year statutory accounting profit of $1,560 million includes property valuations, Income statement derivative mark-to-markets, share based payments and other non-cash items FY22 FY23 – Revaluation gains were lower in FY23 than FY22 due to the increase in cap rates. The gains $M
Slide 11: Balance Sheet
BALANCE SHEET + Group balance sheet remains well positioned with low financial leverage Balance sheet – Gearing 8.3%4 (8.5% in FY22) and 20.8%5 on a look-through basis AS AT AS AT + Reduction in stabilised portfolio reflects the impact of asset sales 30 JUNE 2022 30 JUNE 2023 $M $M + Partnership sta
Slide 12: Group Liquidity Position
GROUP LIQUIDITY POSITION + Cash and available lines of credit (excluding Partnership debt and equity) of $3.1 billion as at 30 June 2023 – $1.4 billion in cash, $1.7 billion of available lines – Weighted average debt maturity profile of 5.5 years + Gearing at 8.3%¹ (20.8%² look-through). Consistent
Slide 13: Operational Performance
Rotterdam Logistics Centre, Alblasserdam, Netherlands 03 OPERATIONAL PERFORMANCE 13 1H FY22 RESULTS
Slide 14: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE + Guided by our 2030 Sustainability Strategy, Goodman continues to integrate ESG into its business targets SUSTAINABLE PROPERTIES AND PEOPLE, CULTURE AND CORPORATE GOVENANCE AND PLACES COMMUNITY PERFORMANCE + Goodman’s global operations are on track to remain car
Slide 15: Property Investment
PROPERTY INVESTMENT + Underlying property fundamentals remain strong in our markets as we continue to Property investments experience high occupancy and positive rental reversions to market in most locations FY22 FY23 – Occupancy of 99%2 Direct ($M) 103.7 87.4 – Like-for-like net property income gro
Slide 16: Development
DEVELOPMENT + Activity associated with supply chain optimisation, productivity and growth in the digital Developments economy are continuing drivers of customer demand for industrial space in our locations, FY22 FY23 notwithstanding moderating demand overall. Our execution has been strong and we hav
Slide 17: Management
MANAGEMENT + External AUM of $76.3 billion, up 11% on FY22 Management – AUM increase primarily driven by development completions and acquisitions with valuations net FY22 FY23 positive for the year. External stabilised assets are up 14% since FY22 Management earnings ($M) 588.4 480.6 – We expect dev
Slide 18: Management Platform
MANAGEMENT PLATFORM HONG KONG CONTINENTAL UNITED AUSTRALIA SAR USA EUROPE CHINA JAPAN NEW ZEALAND KINGDOM BRAZIL Partnership AUM ($B) 27.4 12.6 10.3 7.8 6.7 4.6 4.4 2.3 0.2 Number of Partnerships 7 1 1 2 1 3 1 3 1 GMG co-investment (%) 26.4 20.4 55.0 19.8 20.0 18.2 25.2 35.0 15.0 GMG co-investment (
Slide 19: Outlook
Artist’s impression. Data Centre Project, Hong Kong, SAR China 04 OUTLOOK 19 GOODMAN GROUP FY23 RESULTS
Slide 20: Outlook
OUTLOOK Goodman is positioned well for FY24. + Structural trends in our sector and particularly our + The Partnerships have strong balance sheets and locations remain strong. appropriate liquidity and this should support cash flow Our focus on the digital economy, and – Consumers still require faste
Slide 21: Outlook
OUTLOOK + We remain focused on the development-led growth + We are positioned well heading into FY24, with a strategy. Given our established expertise globally, and significant development workbook underway, underlying financial capacity, we believe there will be attractive structural demand from cu
Slide 22: Appendix: Results Analysis
01 APPENDIX RESULTS ANALYSIS 22 GOODMAN GROUP FY23 RESULTS
Slide 23: Profit and Loss
PROFIT AND LOSS Property Non-operating Total investment Management Development Operating expenses items Category $M $M $M $M $M $M Gross property income 122.8 119.1 – – – 3.7 Management income 438.9 – 438.9 – – – Development income1 1,407.2 – 41.7 1,365.5 – – Net gain from fair value adjustments on
Slide 24: Reconciliation Non-Operating Items
RECONCILIATION NON-OPERATING ITEMS Year ended 30 Total June 2023 Non-operating items in statutory income statement $M $M Property valuation related movements Net gain from fair value adjustments attributable to investment properties 278.9 Share of net gain from fair value adjustments attributable to
Slide 25: Financial Position
FINANCIAL POSITION Property Direct Assets investment Development Other Total As at 30 June 2023 $M $M $M $M $M Cash – – – 1,360.1 1,360.1 Receivables – – 301.2 245.8 547.0 Inventories 451.3 – 1,794.2 – 2,245.5 Investment properties 1,125.3 – 519.5 – 1,644.8 Investments accounted for using equity met
Slide 26: Business Performance Analysis
BUSINESS PERFORMANCE ANALYSIS + Operating margins have steadily increased + ROA reflects – Longer term benefits of focused strategy, capital management and funding – Positive performance from investment property on a like-for-like basis – Income growth has exceeded expense growth in the active busin
Slide 27: Net Tangible Asset Movement
NET TANGIBLE ASSET MOVEMENT 1. Calculated based on 1,883.8 million securities being closing securities on issue. 27 GOODMAN GROUP FY23 RESULTS
Slide 28: Property Valuations
PROPERTY VALUATIONS + Revaluation gains across the global portfolio for the full year totalled $0.8 billion, with the Group’s share $0.8¹ billion + Over the full year the market rent, cashflow assumptions and development completions have more than offset the loss due to cap rate movements + The glob
Slide 29: Appendix: Property Investment
Castellbisbal Logistics Centre, Barcelona, Spain 02 APPENDIX PROPERTY INVESTMENT 29 29 GOODMAN GROUP FY23 RESULTS
Slide 30: Leasing
LEASING 2.5m 99% SPACE LEASED OCCUPANCY Across the Partnerships: + 2.5 million sqm leased over the 12 months, equating to $352 million of annual property income¹ + High occupancy at 99%¹. Leasing area Average lease Net annual rent $M Term (years) Region (sqm ‘000) Australia / New Zealand 916 146.9 4
Slide 31: Customers
CUSTOMERS Goodman Business Park, Greater Tokyo, Japan 31 GOODMAN GROUP FY23 RESULTS
Slide 32: Direct Portfolio Detail
DIRECT PORTFOLIO DETAIL AXIS Alexandria, Sydney, Australia + Long term strategic portfolio with potential for higher and better use, re-zoning and redevelopment + 19 properties with a total value of $2.1¹ billion located primarily in the Sydney market – Represents a significant part of the urban ren
Slide 33: Appendix: Development
03 APPENDIX DEVELOPMENT 33 33 GOODMAN GROUP FY23 RESULTS
Slide 34: Developments
DEVELOPMENTS FY23 Developments As at 30 June 2023 Completions Commencements Work in progress Value ($B) 6.9 6.0 13.0 Area (m sqm) 1.5 1.1 3.4 Yield (%) 7.4 6.5 6.6 Committed (%) 99 57 59 Weighted average lease term (years) 13.0 15.0 12.7 Development for third parties or 87 74 81 Partnerships (%) Aus
Slide 35: Appendix: Management
04 APPENDIX MANAGEMENT 35 GOODMAN GROUP
Slide 36: Global Platform
GLOBAL PLATFORM CONTINENTAL EUROPE/UK ASIA $11.5BN AUM $24.7BN 135 AUM Properties 78 Properties THE AMERICAS $10.9BN AUM 30 Properties OUR GLOBAL NETWORK $81.0BN Assets under management (AUM) 432 Properties AUS/NZ 14 $33.9BN Current Goodman global presence. AUM As at 30 June 2023 (Australian currenc
Slide 37: Management – AUM
MANAGEMENT – AUM + The majority of Goodman’s assets reside in Partnerships – The Group manages 20 Partnerships with 51 investors who are represented on the Boards and Investment Committees independent of Goodman – Goodman maintains a 29% average equity cornerstone position in the Partnerships to sup
Slide 38: Appendix: Capital
Artist’s impression of Data Centre, Amsterdam, The Netherlands 05 APPENDIX CAPITAL 38 GOODMAN GROUP FY23 RESULTS
Slide 39: Currency Mix
CURRENCY MIX 39 GOODMAN GROUP FY23 RESULTS
Slide 40: Financial Risk Management
FINANCIAL RISK MANAGEMENT + The Group has a robust capital management framework, under its Financial Risk Management (FRM) policy. This provides: – Stronger balance sheet which has been reflected in our credit ratings from S&P and Moody’s BBB+ / Baa1 respectively – Covenants that are appropriate for
Slide 41: Financial Risk Management (cont)
FINANCIAL RISK MANAGEMENT (CONT) + Interest rate payments are hedged to 80% over the next 12 months – Weighted average hedge rate of 2.64%¹,2,3 – NZD – hedge rate 2.45% – JPY – hedge rate 0.24% – HKD – hedge rate 1.58% – GBP – hedge rate 1.63% – Euro – hedge rate 1.69%² – USD – hedge rate 4.19% + We
Slide 42: Financial Risk Management (cont)
FINANCIAL RISK MANAGEMENT (CONT) Foreign currency denominated balance sheet hedging maturity profile Weighted average Weighted average Amount maturity exchange rate Amount receivable1 payable1 NZ$ 2.7 years 1.0775 A$696.4m NZ$750.0m HK$ 3.4 years 5.5324 A$1,598.2m HK$8,840.0m US$ 2.7 years 0.7221 A$
Slide 43: Exchange Rates
EXCHANGE RATES Statement of financial position – exchange rates as at 30 June 2023 Currency Exchange rate AUDGBP – 0.5249 (30 June 2022: 0.5676) AUDEUR – 0.6109 (30 June 2022: 0.6594) AUDHKD – 5.2235 (30 June 2022: 5.4241) AUDBRL – 3.1911 (30 June 2022: 3.5905) AUDNZD – 1.0871 (30 June 2022: 1.1057)
Slide 44: Thank You
THANK YOU For more information visit goodman.com Important Notice This document has been prepared by Goodman Group (Goodman Limited (ABN 69 000 123 071) and Goodman Funds Management Limited (ABN 48 067 796 641) (AFSL 223621) as the Responsible Entity for Goodman Industrial Trust (ARSN 091 213 839) a